All countries face dangerous possibility of being cut off from global financial market at Washington's whim
It is abundantly clear that the United States, by exploiting the U.S. dollar's global dominance, is converting the international financial system into an international sanctions system.
In the mid 1960s, when fixed exchange rates based on the post-World War II gold standard were gradually replaced by a global system reliant on the dollar as the primary means of cross-border payments and reserves, France's then Finance Minister Valery Giscard d'Estaing coined the phrase "exorbitant privilege" to bemoan a United States taking advantage of the dollar dominance for self-interest.
Over the past more than 50 years, the United States has transformed that "exorbitant privilege" into an "exorbitant weapon of mass financial destruction" for geopolitical contention, and pulled the trigger multiple times.
In early of the century, Washington executed the same playbook in its dealing with the Iran nuclear issue, expelling Iranian banks from SWIFT and banning imports of Iranian energy. Even now, the Iranian economy is still struggling in the shadow of Washington's sanctions.
The latest sanctions and threats of more sanctions on Russia are another salient example that Washington is getting increasingly unscrupulous in abusing its dollar hegemony for self-serving purposes. The global community should stay ever more vigilant against Washington's unbounded financial terrorism.
America's messing around is reminding all countries of the dangerous possibility of being cut off from the global financial market at Washington's whim.
As a hedge against the risk of falling into the prey of Washington's financial terrorism, de-dollarization is being accepted as a rational option by more.
Since the 2000s exactly when Washington started using the dollar dominance as a menacing tool for geopolitical coercion, the dollar's position as the world's dominant reserve currency has been going downhill.
According to data from the International Monetary Fund, in 2021, the dollar accounted for less than 60 percent international foreign currency reserves, while in 2000, the number is more than 70 percent.
By contrast, currencies of some emerging economies like the Chinese renminbi are gaining a larger share in international foreign currency reserves and transnational transactions.
People with basic economic knowledge know that the value of a currency rests on people's trust in its issuer, typically a country's government. The eroding dollar dominance is a prognostic indicator of the shrinking trust the world holds towards Washington.
The United States does not lack world-class minds to tell that Washington's addiction to dollar weaponization is provoking a backlash: the world's trust in the U.S. dollar and a global financial transaction system underpinned by the dollar is fading away. There is only one way to explain Washington politicians' craziness: they have grown too hubristic to make rational calls.
Like in the game of Jenga, the tower of the dollar dominance is still standing, yet some of its blocks are being taken away. A complete collapse may take some time, yet seems inevitable in the future if Washington continues down the foolish and destructive path.
- Beijing
Anonymous
3 comments:
These 'sanctions' are hitting the rich Jewish oligarchs very hard:
https://www.unz.com/article/twilight-of-the-oligarchs/
'For these eastern Jewish elites, the war in Ukraine has had the doubly concerning effect of impacting their finances and raising their profile. Petr Aven, Mikhail Fridman, German Kahn, Roman Abramovich, Alexander Klyachin, Yuri Milner, Vadim Moshkovich, Mikhail Prokhorov, Andrey Rappoport, Arkady Rotenberg, Boris Rotenberg, Igor Rotenberg, Viktor Vekselberg, God Nisanov, Oleg Deripaska, Alexander Abramov, Gavril Yushvaev, Zarakh Iliev, Vladimir Yevtushenkov, Arkady Volozh, Eugene Schvidler, Leonid Simanovskiy, Yuri Shefler, Kirill Shamalov, Aleksandr Mamut, Lev Kvetnoy, Yevgeniy Kasperskiy, Yuriy Gushchin, Oleg Boyko, Leonid Boguslavskiy, are just some of those who have hidden in plain sight for some time, but now find themselves not only discussed, sanctioned, and blacklisted, but also grouped together in lists that highlight the startling patterns of their wealth accumulation and ethnic partnership.
In 2018 the U.S. Treasury department published a list of Russians they were considering for sanctions, and the list has continued to cause unease in Jewish circles. The Times of Israel recently tried to downplay the Jewish prominence by arguing that “At least 18 of the figures on [the Treasury list] are Jewish oligarchs,” while adding that the list consists of 210 names (meaning a Jewish representation of 8.5%).'
Aiyah! US$ gone, so what? Still got other currency like the Swiss Frank, Euro and Japan Yen. In any case, we use Singapore dollar. Life got enough worry, no need to look for other problems. You are not economists, just leave the problem to them. They know better than us. We need to worry about whether our CPF enough, and whether BTO price is affordable.
The US$ accounting for less than 60% international currency reserves in 2021 does not in fact indicate the real decline, as trillions of US$ printed during those years have been put into circulation to hide the real decline which is much more than what it really is. Sure, other countries and currencies have also been printed, but never in the trillions like the US$.
So what is the real decline? And what will be the decline, say in 2022? It is no more a free ride for the USA as inflation at home is a big problem with too much fiat money that the rest of the world is moving away from. The inflation that they spread around the world in the past, with their unrestrained money printing, has gone home to roost.
Now they are trying to curb inflation by increasing interest rates. That will really pop the bubble.
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